Report shows business hit hard by Obama's tax plan

"The fact that 'only' 2 or 3 percent of taxpayers with business income would face higher taxes is meaningless to the debate," Tax Foundation President Scott Hodge said in prepared remarks. "What matters most is not the number of taxpayers impacted, but the amount of business income — and, therefore, business activity — impacted."

The report goes on to say that more than 74 percent of tax filers in the highest tax bracket report some business income, compared to 20 percent of those in the lowest bracket.

Of the roughly $864 billion in taxable business income reported on individual income tax returns in 2008, nearly 68 percent was claimed by taxpayers earning more than $200,000, and 35 percent was claimed by taxpayers earning above $1 million.

The Bush tax cuts affect businesses that are taxed at individual tax rates.

The Tax Foundation states that more businesses are taxed at individual rates than at corporate rates.

Small businesses that are taxed at individual rates nearly tripled between 1980 and 2007, from roughly 10.9 million to more than 30 million. Over this same time period businesses taxed at corporate rates have declined.